Famed internet writer and thinker Clay Shirky has taken a look at the RIAA's strategy of suing uploaders and what that means for the evolution of file-sharing (File-sharing Goes Social). He concludes that the strategy (which he calls "Crush the Connectors") will work, though not as well as the RIAA would like. It won't work as well as the RIAA would want because people will withdraw into closed social networks for file-sharing that outsiders cannot penetrate.
The disadvantage of social sharing is simple -- limited membership means fewer files. The advantage is equally simple -- a socially bounded system is more effective than nothing, and safer than Kazaa.
If Kazaa, Gnutella and others are severely damaged by the Crush the Connectors attack, users will either give up free file-sharing, or switch to less efficient social spaces. This might seem like an unalloyed win for the RIAA, but for one inconvenient fact: there are more people than are songs.
Of course, I've been talking about this for quite awhile, and this is one of the reasons I advocate the Public/Private distribution distinction in copyright, see, for example a short post of mine on LawMeme (Share with Friends, Not Strangers).
Shirky notes that such private social networks would generally be fairly effective at providing access to the most popular works, but their efficiency for providing access to more obscure works would be greatly degraded (as opposed to the public file-sharing networks). Consequently, some people will defect from file-sharing to paying for content or subscriptions to content. In Shirky's words:
Reduced efficiency might send many users into online stores, and users seeking the hot new song might be willing to buy them online rather than wait for the files to arrive through social diffusion, which would effectively turn at least some of these groups into buyers clubs.
I would add that, in some ways, the mid-tier artists would benefit the most from this system, as the most popular artists' works would readily be shared but the mid-tier would most easily be reached through pay systems. So, in some sense, the most profitable artists might be those who aren't wildly popular. I think that is kind of a neat result.
Like Lawrence Solum and share with friends, not strangers, Shirky doesn't think the RIAA is likely to look upon such a model favorably:
The RIAA's reaction to such social sharing will be unpredictable. They have little incentive to seek solutions that don't try to make digital files behave like physical objects. They may therefore reason that they have little to lose by attacking social sharing systems with a vengeance.
Indeed, Mary Hodder at bIPlog is very, very (very) concerned that aggressive attacks on such networks might turn file-sharing into a version of "East Berlin in the 80's, where everyone suspected everyone else as being a spy" (Clay Shirky on File Sharing). Actually, I don't think this is terribly likely. The RIAA will have to patrol for private, social networks that go public, but there won't be a need for spies and infiltrators at parties. Instead, there will always be those who aren't terribly concerned with security and will too readily offer access to their friends' private networks in chat room and IRC channels. Crackers and script kiddies will quickly publicize systems that haven't been compromised by the RIAA, but by rather poor security decisions by members of these private darknets.
One interesting analogy would be to the social networks of sexual partners. People are careful in choosing sexual partners because there are sexual risk-takers out there who don't take precautions. When you let someone into your sexual network, you take the chance that they aren't taking the proper security precautions. File-sharing networks might end up acting similarly.